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Top tips for running a successful non-profit

If you've successfully run a for-profit business, switching to non-profit should be a breeze, right? No pressure from investors, no taxes, how could it get any easier? Well, proceed with caution. Take over the reins for a non-profit and you'll be in for an education. Here are some tips to help you achieve success in running a non-profit.

What is a Non-Profit?

A non-profit is an organization or corporation that does not make a profit the way a business does. In other words, the purpose of a non-profit is something other than making money, such as a charitable, educational, recreational, or cultural purpose. A non-profit is also known as a 501(c)(3) organization, which refers to the particular regulation in the Internal Revenue Service (IRS) tax code. 501(c)(3) defines "non-profit" as a religious organization, a charitable organization, or a social and recreational club, to cite some examples.

Organizations must file for state, local, and federal tax-exempt status in order to qualify as a non-profit in the eyes of the law and apply for grant money. Non-profits fund their programs and services with monies awarded through grants and special fundraising events, as well as volunteerism and in-kind giving. Any profits that are generated by a non-profit are reinvested into these programs and services.

Tips for Running a Successful Non-Profit

1. A Clear Mission Statement

The mission statement establishes the reason that a non-profit exists. Without a clear sense of purpose, it is easy for non-profits to head in many directions and accomplish very little. A clear mission statement is also a necessity when applying for grants and other monies to fund a non-profit's programs and services.

2. Excellent Record Keeping Practices

Record keeping is essential to any business and especially so for non-profits. Filing the correct paperwork such as the IRS Form 990, the tax return form filed by non-profits, on time and correctly ensures that a non-profit will maintain its non-profit or tax-exempt status.

3. Use the Board of Directors

The board of directors, comprised of business leaders from within the community, is the most valuable resource a non-profit has. All too often, it is not used to its full advantage. Not only does the board of directors serve a legal function in that it provides guidance and direction for the non-profit, it should provide financial assistance and encourage teamwork among the staff, management, as well as themselves, and cultivate and retain excellent staff members.

4. Establish and Maintain Funding Sources

Without a source of funding, a non-profit ceases to exist. Therefore establishing and maintaining sources of funding are extremely important to the survival of a non-profit and deserve a dedicated staff member or team of staff members. Maintaining these sources are all an essential part of the growth and sustainability of a non-profit. Keep an up-to-date donor database, cultivate and maintain corporate sponsors and volunteers by sending personal updates or newsletters or inviting them to a "thank-you" luncheon or dinner.

5. Don't Forget About Public Relations

As a non-profit, don't neglect your public relations arena. As with a for-profit business, always make an effort to promote your non-profit organization, whether it's at a family picnic or networking with the local business community. Press releases are another excellent way to inform the public about your non-profit's accomplishments.

6. Avoid Founder's Syndrome

Founder's syndrome occurs when the founder of a non-profit becomes too wrapped up in the day-to-day activities doing it all alone instead of delegating to staff members—hindering the growth of the non-profit in the process. Soon the running of a non-profit assumes the personality and personal goals of the founder instead of following its mission statement. Founder's syndrome is typical of small or family run businesses as well. In the case of founder's syndrome it is up to the board of directors to confront the executive director and demand that changes take place. In a worst-case scenario, the executive director is replaced or the non-profit is dissolved.

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